Is marketing worth the investment?

In April 2017, Google’s Car Purchasing UK Report showed that the UK motor sector spent £115.9 million on marketing, both direct mail and online.

Car manufacturers do have a hefty marketing budget in general, where some other sectors may not have such an amount at their disposal. With online marketing as expensive as it is, is it worth the price tag? Volkswagen service providers Vindis have looked into the matter for you.

Automotive industry

In association with TNS, Google’s Drive to Decide Report discussed the ways in which car shoppers today are more tech savvy than ever. Over 82% of the UK population aged 18 and over has access to the internet for personal reasons, 85% use smartphones and 65% choose a smartphone as their preferred device to access the internet. These figures show that for car dealers to keep their head in the game, a digital transition is vital.

The report also showed that 90% of auto shoppers carry out online research. 51% of buyers starting their auto research online, with 41% of those using a search engine. To capture those shoppers beginning their research online, car dealers must think in terms of the customer’s micro moments of influence, which could include online display ads – one marketing method that currently occupies a significant proportion of car dealers’ marketing budgets.

Placing just behind the retail sector, eMarketer showed the car industry accounting for 11% of the total UK Digital Ad Spending Growth in 2017. The automotive industry is forecast to see a further 9.5% increase in ad spending in 2018.

But how is online influencing buyers? 41% of shoppers who research online find their smartphone research ‘very valuable’. 60% said they were influenced by what they saw in the media, of which 22% were influenced by marketing promotions – proving online investment is working.

Traditional marketing, such as TV and radio, are still the preferred method for the automotive industry. But in the last past five years, it is digital that has made the biggest jump from fifth most popular method to third, seeing an increase of 10.6% in expenditure.

The fashion world

Online sales for the fashion industry topped £16.2 billion in 2017, showing the vital need for online marketing investment in this sector. This figure is expected to continue to grow by a huge 79% by 2022. So where are fashion retailers investing their marketing budgets? Has online marketing become a priority?

In December 2017, nearly a quarter of all purchases came from ecommerce. According to the British Retail Consortium, online brands such as ASOS and Boohoo continued to embrace the online shopping phenomenon. ASOS experienced an 18% UK sales growth in the final four months of 2017, whilst Boohoo saw a 31% increase in sales throughout the same period.

Big brands are already investing millions into this rise of online marketing, with Next and Marks and Spencer joining the fray. John Lewis announced that 40% of its Christmas sales came from online shoppers, and whilst Next struggled to keep up with the sales growth of its competitors, it has announced it will invest £10 million into its online marketing and operations.

Shoppers are picking smartphones over the high street more and more. According to PMYB Influencer Marketing Agency, 59% of fashion marketers increased their budget for influencer marketing last year – an essential marketing tactic in the fashion industry. In fact, 75% of global fashion brands collaborate with social media influencers as part of their marketing strategy.

In 2017, more than a third of marketers found digital marketing to be more successful than traditional marketing. 22% of customers are said to be acquired through influencer marketing.

Utilities industry

More and more customers are relying on comparison websites, which is the key marketing point for utility companies. With comparison websites spending millions on TV marketing campaigns that are watched by the masses, it has become vital for many utility suppliers to be listed on comparison websites and offer a very competitive price, in order to stay in the game.

The largest four comparison websites – Compare the Market, MoneySupermarket, Go Compare and Confused.com are among the top 100 highest spending advertisers in the UK. But does that marketing investment reflect on utility suppliers?

Comparison websites can make or break customer retention for a company. If you don’t beat your competitors, then what is to stop your existing and potential new customers choosing your competitors over you?

One of the big Six, British Gas, has shifted its focus from acquisition to retention. Whilst the company recognise that this approach to marketing will be a slower process to yield measurable results, they firmly believe that retention will in turn lead to acquisition. The Gas company hope that by marketing a wider range of tailored products and services to their existing customers, they will be able to improve customer retention.

An investment of £100 million is to be put towards their loyalty scheme. This is to offer discounted energy and services, which focuses on the value of a customer, their behaviour and spending habits over time to discover what they are looking for in the company. The utilities sector is incredibly competitive, so it is vital that companies invest in their existing customers before looking for new customers.

The utility companies already have a large digital presence. 40% of all searches in Q3 2017 were carried out on mobile, and a further 45% of all ad impressions were via mobile too – according to Google’s Public Utilities Report in December 2017. As mobile usage continues to soar, companies need to consider content created specifically for mobile users as they account for a large proportion of the market now.

Healthcare sector

The healthcare sector has to be more careful when advertising – generally because it is restricted by heavy regulations. The same ROI methods that have been adopted by other sectors simply don’t work for the healthcare market. Despite nearly 74% of all healthcare marketing emails remaining unopened, you’ll be surprised to learn that email marketing is essential for the healthcare industry’s marketing strategy.

Around 2.5 million people use email as a primary form of communication, and the usage has risen in the last few years. This means email marketing is targeting a large audience. For this reason, 62% of physicians and other healthcare providers prefer communication via email – and now that smartphone devices allow users to check their emails on their device, email marketing puts companies at the fingertips of their audience.

One in 20 Google searches are for health-related content, showing the value of online investment for the healthcare industry. This could be attributed to the fact that many people turn to a search engine for medical answer before calling the GP. Pew Research Center data shows 77% of all health enquiries begin at a search engine – and 72% of total internet users say they’ve looked online for health information within the past year. Furthermore, 52% of smartphone users have used their device to look up the medical information they require. Statistics estimate that marketing spend for online marketing accounts for 35% of the overall budget.

And that’s not including social media marketing. Whilst the healthcare industry is restricted to how they market their services and products, that doesn’t mean social media should be neglected. In fact, an effective social media campaign could be a crucial investment for organisations, with 41% of people choosing a healthcare provider based on their social media reputation! And the reason? The success of social campaigns is usually attributed to the fact audiences can engage with the content on familiar platforms.

Is the investment worth it?

It is clear that across all sectors, online marketing is vital! With a clear increase in online demand in both sectors that is changing the purchase process, some game players could find themselves out of the game before it has even begun if they neglect digital.

But some sectors, like utilities, need to consider the bigger picture. Whilst TV and digital appear to remain the main sales driving forces, its more than just creating your own marketing campaign when comparison sites need to be considered. Without the correct marketing, advertising or listing on comparison sites, you could fall behind.

The average firm is expected to allocate at least 41% of their marketing budget to online methods in 2018 according to webstrategies.com. This figure expected to grow to 45% by 2020. Social media advertising investments is expected to represent 25% of total online spending and search engine banner ads are also expected to grow significantly too – all presumably as a result of more mobile and online usage.

Do you think the investment is worth it? If mobile and online usage continues to grow year on year at the rate it has done in the past few years, we forecast the investment to be not only worthwhile but essential.